Banking. Financial system (FS): concept, elements, basics of construction (the most important)

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Banking. Financial system (FS): concept, elements, basics of construction (the most important)

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Topic 45. Financial system (FS): concept, elements, basics of construction

FS - a set of various spheres (links) of financial relations, each of which is characterized by features in the formation and use of funds of funds, a different role in social reproduction. The financial system consists of:

a) national finances - federal, regional, local budgets, the state credit system, the state insurance system, the pension fund, off-budget funds, etc.

b) finances of economic entities - finances of enterprises, commercial banking system, commercial lending and insurance, collateral, exchange systems.

National centralized funds of monetary resources are created by distributing and redistributing the national income created in the branches of material production. The forms of their use are budgetary and extrabudgetary funds that meet the needs of the state in solving economic, political and social problems. Other forms and methods of formation and use of monetary funds are used by the credit and insurance links of the financial system. Decentralized cash funds are formed from cash funds and the savings of the enterprises themselves.

The basis of the financial system is the finances of enterprises - they are directly involved in the process of material production. The source of centralized state funds of funds is the national income created in the sphere of material production.

General government finance - leading role: in ensuring certain rates of development of all sectors of the national economy; redistribution of financial resources between sectors of the economy and regions of the country, production and non-production areas, as well as forms of ownership, individual groups and strata of the population.

The state budget is the main link in the financial system - a form of formation and use of a centralized fund of funds to ensure the functions of public authorities. With the help of the budget, the national income is redistributed, which creates the opportunity to maneuver with money and purposefully influence the pace and level of development of social production, which makes it possible to influence the country's unified economic and financial policy. In modern conditions, state budget funds are directed to the implementation of investment policy, subsidizing enterprises, financing the conversion of defense industries, which contributes to the formation of a rational structure of social production, building up scientific and technical potential, and updating the material and technical base. Budget expenditures on the socio-cultural sphere have not only social, but also economic significance, since they represent the most important part of the costs of reproducing the labor force and serve to improve the material and cultural standard of living of the people.

Off-budget funds are funds from the federal government and local governments associated with the financing of expenses not included in the budget. These funds are formed at the expense of mandatory target deductions, which are set as a percentage of the wage fund and are included in the cost of production. They have a strictly designated purpose, which guarantees the use of funds in full. The separate functioning of off-budget funds allows for prompt financing of the most important social events.

State credit reflects credit relations regarding the mobilization by the state of temporarily free funds of enterprises, organizations and the population on a repayment basis to finance government spending. Individuals and legal entities act as lenders, and the state acts as a borrower. The state attracts additional financial resources by selling bonds, treasury bills and other types of state securities on the financial market. This form of credit allows the borrower to direct the mobilized additional financial resources to cover the state budget deficit without issuing for these purposes. State credit is also used to stabilize money circulation in the country.

The Insurance Fund provides compensation for possible losses from natural disasters and accidents, and also contributes to their prevention.

The finances of enterprises of various forms of ownership, being the basis of the country's unified financial system, serve the process of creating and distributing the social product and national income. The security of centralized monetary funds with financial resources depends on the state of the finances of enterprises. At the same time, the active use of enterprise finances in the process of production and sale of products does not exclude the participation of the budget, bank loans, and insurance in this process. Under market conditions, enterprises independently distribute revenues, form and use production and social funds, and seek the necessary funds to expand production using credit resources and financial market opportunities.

Authors: Shevchuk D.A., Shevchuk V.A.

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